” The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” – https://www.nber.org Every month, we track the last 4 monthly items mentioned above in our “NBER Coincident Recession Model” which we publish for subscribers. These are affectionately known as […]
Archive | January, 2013
Estimating recession probabilities using Gross Domestic Product & Income
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Coincident data not playing nice with the bears
Over the last two months we had Real Retail Sales, Industrial Production, Personal Incomes and Non-Farm payrolls all pushing new expansion highs. The only data not in for December now is Real Incomes. In addition we have noted upward revisions as opposed to the downward revisions promised by the recession-is-here camp. With neither leading nor co-incident data to lean on in support of a recession call, options are getting slim in defense of a recession that is supposedly in its […]
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Structural distortions hazardous to recession forecasting
Very few people realise just how close we came to a recession in the past 12 months, purely on an economic indicators perspective and not counting external risks such as the Fiscal Cliff debate. However, many traditional long leading indicators based on for example the yield curve and the unemployment rate, belie just how close a shave we had. This is because of deep structural changes and/or distortions brought about by the Great Recession of 2008. As it is, most […]
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